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In the 1980s, Congress was growing increasingly concerned about the competitiveness of U.S. industry, particularly with respect to the timely transfer of technology from government labs to the private sector. Thus, in 1986, it passed the Federal Technology Transfer Act (FTTA). The FTTA allowed government laboratories like the National Institutes of Health (NIH) to enter into Cooperative Research and Development Agreements (CRADAs) with the pharmaceutical industry. With a CRADA in place, scientists at the NIH were allowed to conduct collaborative research with industry scientists to promote the discovery of new drugs.

Unfortunately, the collaborations envisioned by the passing of the FTTA were not immediately forthcoming. This is because the NIH policy was that the price of any resulting product would have to reflect the taxpayers’ investment and the health and safety needs of the public. Essentially, this would open the door to having the government control the price of any drug to come out of such a collaboration. Naturally, industry shied away from such collaborations rather than open a Pandora’s Box of price controls. Recognizing this, NIH Director and Nobel Laureate, Harold Varmus, ended this policy in 1995 and NIH – industry collaborations began to flourish.

“The NIH and its mission deserve strong support yet citizens remain concerned about public dollars being used to research and develop drugs and treatments which are then commercialized with the public getting a short shrift.”

“Scientific advances rarely happen overnight or as the result of any single agreement – a partnership, CRADA or license. But there should be a mechanism in place that ensure that the return on taxpayer investment is considered.”

“ My bottom line: When taxpayer-funded research is commercialized, the public deserves a real return on its investment.”

1) Dr. John O’Shea of the NIH presented his early JAK results in a presentation he made at the FASEB Summer Conference on Lymphocytes and Antibodies in 1993. He later published this work in 1994. Thus, this work was available for all to see.

2) While O’Shea’s results were intriguing, they were theoretical. To prove the importance of the JAK pathway, someone needed to discover a compound to test the hypothesis that inhibiting the JAK enzyme was of value in treating disease. This was certainly not in the purview of the NIH back then.

3) To advance the science in this field, Pfizer and the NIH entered into a CRADA and also obtained a non-exclusive license from the NIH for access to JAK proteins to be used for research. At least 10 other companies were granted similar licenses.

4) Pfizer then spent the next 18 years and over $1 billion to discover a compound with the necessary safety and efficacy to prove that Xaljanz could, in fact, be a valued new medicine to treat rheumatoid arthritis (RA).

It is hard for me to find where the American public got a short shrift in this situation. According to the “Report to Congress on the Affordability of Inventions and Products” that was issued in 2004: “The NIH was established with the mission of science in pursuit of fundamental knowledge about the nature and behavior of living systems and the application of that knowledge to extend healthy life and reduce the burdens of illness and disability. In those instances when such research leads to a novel technology, it is the role of the NIH and recipients of NIH funds to disseminate the research findings and, as appropriate, pursue further development to bring technologies to practical application to benefit the public.” That is exactly what happened here.

As for “a real return” on taxpayer investment, it must be pointed out that, while the NIH both carries out itself and also funds OUTSTANDING basic research, it is not often that this research leads to a major new medicine. Yet, John O’Shea’s laboratory experiments, his presentation of it, and the subsequent interactions between him and the Pfizer researchers led eventually to a new medicine that will benefit millions of RA sufferers. Isn’t that the intended return on the taxpayers’ investment in the NIH? Were that all taxpayer investments were as successful as this one.

Finally, Wyden commented on the fact that Xeljanz is an expensive drug costing $2,000/month. There is no doubt that this is costly. However, Xeljanz is priced slightly less than current RA drug treatments, and it may have significant advantages over other marketed drugs. Should Pfizer be penalized in its drug pricing for some early collaborative NIH research done almost two decades ago? If that is the case, where does this stop? Should the government be allowed to seek rebates from pharma companies for any drug that may have been discovered from the work that emanated out of the Human Genome Project? Furthermore, pharma can’t be the only industry that has collaborated with government research agencies. Will any product that has it roots in a government collaboration be subject to price constraints? For example, should commercial products resulting from NASA research be subject to government rebates?

I would hope that the Wyden proposal is given a “short shrift". If this doesn’t happen, companies will shy away from any contact with programs that can be perceived to have ties with government research agencies. At a time when most people are clamoring for greater collaborations, the Wyden program would move us back to the 1980s, when the public sector avoided government collaborations for these very reasons. Ironically, Francis Collins and the NIH have established the National Center for Advancing Translational Studies (NCATS) whose purpose is to accelerate the discovery of new drugs. Unfortunately, adoption of Wyden’s views would cause companies to avoid any advances that NCATS would make. This would not benefit taxpayers one iota.